Assume that the required reserve ratio is 10 percent. A bank has deposits of $1,000,000 and cash of $500,000 in the Fed. The bank has demand deposits equal to $1,500,000. Given this information, the bank has excess reserves of

The income effect associated with an income tax occurs because the individual has to work more to make up for the income paid in taxation

a. True b. False

First, explain why the money demand curve is downward sloping. Second, explain what factor(s) will cause shifts in the money demand curve

What will be an ideal response?